Coach’s leather goods were on display on two very different runways on Monday.
In the afternoon, models walked along the north end of New York’s High Line park, decked out in looks from the brand’s spring/summer 2025 collection — oversized jackets and blazers, distressed graphic t-shirts, leather mini-skirts and more — to an audience of celebrities and fashion industry insiders. Meanwhile, just hours earlier and three miles to the south, the brand’s parent company, Tapestry, rolled in racks of handbags at the US District Court in lower Manhattan for a very different, and perhaps more consequential, kind of spectacle.
The trial between Tapestry, which also owns Kate Spade and Stuart Weitzman, and the Federal Trade Commission, which has sued to block its $8 billion acquisition of its rival, Michael Kors owner Capri, citing potential antitrust violations, kicked off on Monday. In the coming days, the two will present opposing evidence as US District Judge Jennifer L. Rochon determines whether to accept the FTC’s argument that a Coach and Michael Kors tie-up would eliminate competition in the accessible luxury handbag market and unfairly increase prices. Tapestry’s rack of handbags, which included various brands beyond its portfolio, was meant to demonstrate that consumers have more than enough options. Closing arguments are slated for Sept. 30.
There’s plenty at stake. A merged Tapestry and Capri (which also owns Versace and Jimmy Choo) has a combined $13 billion market cap. Together they perhaps represent the American fashion industry’s best chance at creating a conglomerate to rival French giants LVMH and Kering, which dominate the global luxury market.
“We haven’t had that kind of large luxury or even high contemporary conglomerate in the United States,” said Susan Scafidi, academic director at the Fashion Law Institute. “This kind of a merger would be not anti-competitive but procompetitive when you look at the global picture.”
“We remain fully confident in the merits of this transaction and the ways in which it will benefit consumers,” a Tapestry spokesperson said in an emailed statement.
A Semantics Battle
In court on Monday, Tapestry and the FTC duked it out over what is and isn’t accessible luxury.
Nicole Lindquist, an attorney with the FTC, took the stand to establish that Coach and Michael Kors are directly competitive in this market — which the agency defines as items priced between $100 and $1,000, made in separate factories from higher-end goods and sold to customers that can’t afford pricier alternatives. As well, she argued the two brands are not in competition with luxury brands like Louis Vuitton or mass-market sellers that offer lesser quality goods at lower prices.
“This case is about working and middle-class women,” Lindquist said, “who are looking for something nice and not willing to break the bank.”
Tapestry’s legal counsel Lawrence Buterman was steadfast in debunking that notion, saying there’s no easy definition of accessible luxury since typical handbag shoppers buy high and low-priced bags.
“Consumers don’t wake up and say ‘I want to buy an accessible luxury handbag,’” Buterman said.
Buterman also reiterated Tapestry’s main argument that there are innumerable direct-to-consumer start-ups that sell handbags for less than $1,000, including Telfar, Cuyana, Brandon Blackwood and Senreve. If Tapestry were to raise prices on bags under a combined Coach and Michael Kors, shoppers could easily migrate to one of those other brands. Lindquist didn’t mention any of these brands in her own opening statement.
Determining antitrust shouldn’t be based on “exercises in semantic gotchas,” Buterman said.
The FTC’s argument that Michael Kors, Coach and Kate Spade dominate the off-price handbag channel — outlet stores — has also received pushback from legal experts. There are countless accessories brands that sell in off-price retailers like TJ Maxx and Nordstrom Rack, and consumers can as easily find good deals on bags ranging from Chanel to Coach online and in-person at resellers like Poshmark, Vestiaire Collective and The RealReal, Scafidi said. As evidence, Buterman presented a Chanel bag the company recently purchased for $900 from an undisclosed reseller during the trial on Monday.
“If you define a market in a small enough way, you’ll ultimately find monopoly power,” Scafidi added. “The fact that consumers can both shop new off-price product and the secondhand product at around the same price point really upends this kind of logic that the FTC has.”
Still, the FTC could get a favourable ruling if the court agrees that Coach and Michael Kors would overwhelmingly dominate the accessible luxury market under the agency’s specific definition. That victory, were it to happen, could send a discouraging message to American brands looking to challenge LVMH, Kering and the Swiss hard luxury player Richemont.
“It would actually limit the development of the fashion industry in the US and limit its growth in that direction,” Scafidi said.
Coach in the Spotlight
In recent years, Coach has transformed its business from a rampant discounter to a go-to for younger shoppers who are willing to buy its $400 Tabby bags and newer silhouettes like its $500 Brooklyn hobo bag — which several guests had on their shoulder at Monday’s show at full price. Coach’s sales jumped 3 percent to $5 billion in its fiscal year that ended in June 2024.
Coach’s runway on Monday certainly made that transition apparent. Nearly everything about the show felt targeted at Gen-Z, from the celebrities who lined the front row (actors Charles Melton and Kathryn Newton, plus “The Summer I Turned Pretty” star Lola Tung) to the models (25-year-old second daughter Ella Emhoff) to the styling of the garments (satin mini dresses were paired with metallic sneakers and crew socks; models wore bag charms shaped like a cassette tape or taxi cab on their shoes).
It also made the argument that its bags appeal to a different cohort than Michael Kors’. Nearly every model in the show carried a bag, but rather than the sleek clutches and carryalls that Michael Kors sent down his last runway (he presents his Spring/Summer 2025 collection on Tuesday), Coach showed a wide array of pieces that were part whimsical, part standard leather goods. There were large backpacks covered in cartoonish stickers (shapes included unicorns, ladybugs and strawberries), shoulder bags affixed with leather charms and covered in quippy doodles like “high level devil” and “dollhouse dreams” and oversized bags in the shape of a teddy bear or Rexy, Coach’s dinosaur mascot.
If the deal goes through, the hope is that Tapestry can deliver the same sort of turnaround for Michael Kors, which saw its revenue drop 14 percent to $675 million in its fiscal first quarter that ended in June as it struggled to maintain demand for its goods amid a broader luxury slowdown.
Now, it’s all a matter of whether or not the court agrees with the FTC.
Additional reporting by Diana Pearl.
